Will the Government Protect You From Debt Collector Abuse?

Photo (cc) by faungg

Money Talks News has been reporting on debt collection abuse for years. Weeks ago we reported that nonprofits like Consumers Union had concluded that the law isn’t strong enough to protect debtors from such abuse. We also did a story explaining that if you’re abused by a debt collector, you might find a free lawyer.

Now the government is jumping on the bandwagon. The Federal Trade Commission’s 2011 annual report [PDF], released this month as part of the Fair Debt Collection Practices Act, reveals that the agency received more complaints about debt collection in 2010 than any other industry. (For other common complaints, see Tips to Avoid the Top 10 Consumer Problems.) The 140,036 total complaints about third-party and in-house collectors comprised 27 percent of all complaints received by the FTC last year – and represented an 18-percent increase from 2009.

Worse than the extent of the problem, however, is its consequences for those affected. As the report put it:

Deceptive, unfair,and abusive debt collection practices…cause substantial consumer injury, including payment of amounts not owed, unintended waivers of rights, invasions of privacy, and emotional distress. In some circumstances, illegal collection practices can place consumers deeper in debt.

Take a look at the 9 categories of collection abuse tracked by the FTC last year:

  • Harassing the alleged debtor or others
  • Demanding a larger payment than is permitted by law
  • Failing to send required consumer notice
  • Threatening dire consequences if consumer fails to pay
  • Failing to identify self as debt collector
  • Revealing alleged debt to third parties
  • Impermissible calls to consumer’s place of employment
  • Failing to verify disputed debts
  • Continuing to contact consumer after receiving “cease communication” notice

In addition to investigating and prosecuting collection agencies that violate federal laws, the FTC also protects consumers by educating them via resources like their Debt Collection FAQ: A Guide for Consumers.

Starting this July, the Consumer Financial Protection Bureau – a new agency created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of July 2010 – will also work alongside the FTC to beef up consumer protection. According to the FTC’s report, the CFPB will have the authority to create debt collection rules as well as collect complaints, conduct related research, and educate consumers and collectors.

In the meantime, check out more stories we’ve done on debt and debt collectors…

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
3 Big Medicare Costs Just Got Bigger
3 Big Medicare Costs Just Got Bigger

Some Medicare premiums and deductibles for 2020 will take a bigger bite out of Social Security payments.

The 5 Most Expensive U.S. States for Retirees
The 5 Most Expensive U.S. States for Retirees

If you have or expect to have a modest retirement income, you may want to avoid spending your golden years here.

15 Purchases That Make Life Easier As You Age
15 Purchases That Make Life Easier As You Age

There are many products that can make getting older — or any time of life — a little easier.

10 Times You’re Right to Be a Cheapskate
10 Times You’re Right to Be a Cheapskate

Sometimes, clever shoppers can save money without sacrificing quality. Here are some great examples of how to do it.

15 Ways Retirees Can Make Their Savings Last Longer
15 Ways Retirees Can Make Their Savings Last Longer

Study these strategies to make your golden years gleam.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

Over 50? The CDC Says You Need These 4 Vaccines
Over 50? The CDC Says You Need These 4 Vaccines

Fall is the time to schedule vaccines that can keep you healthy — and even save your life.

Why Cloth Masks May Increase Your Coronavirus Risk
Why Cloth Masks May Increase Your Coronavirus Risk

A new study finds that wearing a cloth mask can backfire if you don’t clean it properly.

11 Household Items That Go Bad — or Become Dangerous
11 Household Items That Go Bad — or Become Dangerous

When you get the impulse to stockpile these everyday items, pay close attention to their expiration dates.

8 Things You Can Get for Free at Pharmacies
8 Things You Can Get for Free at Pharmacies

In this age of higher-priced drugs and complex health care systems, a trip to the pharmacy can spark worry. Freebies sure do help.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

The 15 Worst States for Retirees in 2020
The 15 Worst States for Retirees in 2020

Based on dozens of metrics tied to affordability, quality of life and health care, these are not ideal places to spend retirement.

The 10 Most Commonly Stolen Vehicles in America
The 10 Most Commonly Stolen Vehicles in America

A new model parks atop the list of vehicles that thieves love to pilfer.

This Is the Cheapest Place to Buy a Used Car
This Is the Cheapest Place to Buy a Used Car

Looking for a good deal on a set of wheels? This should be your first stop.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

5 Keys to Making Your Car Last for 200,000 Miles
5 Keys to Making Your Car Last for 200,000 Miles

Pushing your car to 200,000 miles — and beyond — can save you piles of cash. Here’s how to get there.

26 States That Do Not Tax Social Security Income
26 States That Do Not Tax Social Security Income

These states won’t tax any of your Social Security income — and in some cases, other types of retirement income.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

10 Reasons Why You Should Actually Retire at 62
10 Reasons Why You Should Actually Retire at 62

If you can, here are several good reasons to retire earlier than we’re told to.

7 Surprising Features That Boost Your Home Value
7 Surprising Features That Boost Your Home Value

You can add value to your home without hiring a contractor to do expensive renovations.

5 Things That Make Life More Meaningful for Retirees
5 Things That Make Life More Meaningful for Retirees

Retirees agree: These are the things that give them purpose and fulfillment in their golden years.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.